HomeMy WebLinkAbout2018-02-06 Finance Minutes
City of Tukwila
City Council Finance Committee
FINANCE COMMITTEE
Meeting Minutes
February 6, 2018 5:30 p.m. Hazelnut Conference Room, City Hall
Councilmembers: , Chair; Dennis Robertson, Kate Kruller
Staff: Rachel Bianchi, Peggy McCarthy, Henry Hash, Vicky Carlsen, Bruce Linton, Sherry
Wright, Jay Wittwer, Laurel Humphrey
Guest: Steve Goldblatt, Public Safety Plan Program Management Quality Assurance
Consultant
CALL TO ORDER: Committee Chair Quinn called the meeting to order at 5:30 p.m.
I.PRESENTATIONS
II.BUSINESS AGENDA
Contract Amendment: Fire and Park Impact Fees
A.
Staff is seeking Council approval of an amendment to Contract 17-147 with Berk Consulting,
Inc. to add $20,000 and extend the term through April 2018 to allow completion of the Fire and
Park impact fee study and update. The contract limit has almost been reached, and it is
possible that none, or only a small portion, of the additional $20,000 will be needed for the
additional services, which include presenting the study results to Council. Determining the level
of service standards for Parks and Fire was more challenging than originally expected and
required full Park and Fire facilities inventories. If approved, staff will report back to Committee
how much of the additional budget authority was used. Chair Quinn stated that a thorough
analysis of appropriate fire and park impact fees is very important, and the additional work will
help the Council make a sound decision. Councilmember Robertson also spoke in favor of the
amendment to complete the project. Councilmember Kruller is opposed to the amendment as
she would like staff and the vendor to stay within the original scope and budget. She also
requested a more detailed budget for the additional $20,000. DIVIDED RECOMMENDATION
(QUINN, ROBERTSON IN FAVOR, KRULLER OPPOSED). FORWARD TO FEBRUARY 12, 2018
COMMITTEE OF THE WHOLE.
Public Safety Plan Financing
B.
Staff presented a proposed strategy and timeline for the Committee to identify options and
recommendations on how to fund the budget gap in the Public Safety Plan. There is a significant
gap in construction costs and the original project budget due to market conditions in the region,
and as schematic design progresses on the projects the City Council is receiving more reliable
information on which to base its decisions. It will be important for the Finance Committee to
thoroughly vet options and prepare to make recommendations to the Council around the time
that schematic design is complete for the Justice Center, expected by April. Staff is seeking a
common understanding of assumptions as well as Committee direction on various funding tools.
FinanceCommittee Minutes..................................................................................................................................February 6, 2018
Tools that the Committee is interested in will be built into a financial model that can then be use
dto evaluate implications of those tools.
To kick off this review process, staff presented information on voter-approved bonds, debt
capacity and LTGO bonding, fire impact fees, and land sales and other one-time funds, with
highlights summarized below:
Voter-Approved Bonds: The advisor is now recommending the second bond
issuance of $40.6 million be done in 1 quarter of 2019 so that debt service would occur in 2020.
st
Debt Capacity & LTGO Bonding: The City has capacity for an addition $59 million in Councilmanic
debt, but this will increase as assessed valuation goes up. Committee members asked to review
the current debt horizon chart maintained by staff. While bonds are normally issued for a 20-year
term, the debt payback period could be increased to 30 years which would result in lower annual
debt service payments. Councilmember Robertson asked for details on the total increased cost
difference between 20 and 30 years.
Fire Impact Fees: The City is currently concluding a Fire Impact Fee update study, and if adopted
by Council, staff estimates they would generate between $200K-$400K per year that could be
used to pay off LTGO bonds, up from the average $120K. There is currently around $1.5 million
available to dedicate to fire station projects. Councilmember Robertson requested the specific
impact fee revenues for each year they have been in effect and asked if an automatic escalator
could be included in the update. Councilmember Kruller asked how the proposed fees would
compare with other communities and staff replied that information is being evaluated as part of
the study. Chair Quinn confirmed that the impact fees received from the Segale development
agreement would be dedicated to Fire Station 51.
Land Sales & Other One-Time Funds: There is an estimated $15 million in proceeds from land sales
that could be available to fund the Public Safety Plan. This is a very rough estimate, as appraisals
on the properties have not been performed. There is also $3 million in the 301 fund for parks
acquisition from REET 1 which can also be used for the Public Safety Plan pursuant to a recent
policy decision by the Council. The Council could also designate a specific portion of REET 1 to
the Public Safety Plan to preserve flexibility for parks. The Committee asked for additional detail
on how REET 1 is currently being spent.
Staff will begin to develop the financial planning model , and the
next meeting will include the additional information requests as well as an overview of new
revenue options. Chair Quinn stated an interest in having accurate figures as much as possible
rather than estimates as this conversation moves forward. The Committee also requested a
target date by which they should be prepared to make a recommendation to Council.
DISCUSSION ONLY.
III.MISCELLANEOUS
Adjourned at 6:55 p.m.
Committee Chair Approval
FinanceCommittee Minutes..................................................................................................................................February 6, 2018
Minutes by LH